Global Sourcing, Procurement Strategy, and Risk Management for TESCO

This report critically examines global sourcing methods and proposes a global procurement strategy for TESCO, a multinational retail company. The report begins with an introduction to global sourcing and its importance, followed by an analysis of global sourcing methods, including preliminary research, market and supplier evaluation, supplier selection, implementation, and performance monitoring. The core of the report focuses on proposing a global procurement strategy for TESCO, emphasizing the importance of strategic review, resource and competence analysis, and the application of PESTLE analysis to understand the external environment. The report also discusses the recruitment and management of employees to enhance productivity. The report concludes with recommendations for future development to improve the company's competitive advantage and achieve procurement excellence, providing a comprehensive overview of global sourcing and procurement strategies within the retail sector.

Procurement, Risk,
and Contract
Management

Executive summary
Global sourcing is an activity which involves sourcing of good and services from global market.
This report will include critical examination of various methods of global sourcing and such as
preliminary research, choosing of supplier, market and supplier analysis etc. This report file will
also include global procurement strategy such which will help in analysing external
environments for TESCO such as strategic review, resources and competence analysis, and
recommendation for future development. This report will also include various tools and methods
related to recruitment and management of employees so that productivity of employees and be
augmented and thus help organisation in achieving goals and objective.

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY ..................................................................................................................................4
(a) To critically examine the global sourcing methods...............................................................4
(b) To propose a global procurement strategy which can lead to procurement excellence and
improve the company’s competitive advantage..........................................................................6
CONCLUSION .............................................................................................................................10
REFERNCES:................................................................................................................................11
Books and Journals:..................................................................................................................11

INTRODUCTION
Global sourcing can be defining as the function which is used by global business firm in
order to meet needs of resources collection and perform task in effective way. This is useful in
meeting business standards and performing task according to needs of business (Lysons and
Farrington, 2016). This function is also useful in performing the risk analyses and managing it
according to current needs on business firm. This report is based on study of TESCO. It is a
multinational business firm which is trading in retail industry. TESCO was founded by jack
Cohen in 1919. there are number is issues which are faced by this form while performing its
function at global level. One of this issues is related to lack of resources. In order to fulfilling this
needs, firm use global sourcing as a method. In this report, there is discussion about global
sourcing methods and global procurement strategy which can lead to procurement excellence and
improve the company’s competitive advantage. This will be based on PESTLE analysis and
other theory that will spoor procurement, resourcing and risk management.
MAIN BODY
(a) To critically examine the global sourcing methods
Global sourcing can be defining as a function which is used by business firm in order to
meet needs of resources and deliver goods and services. There are number of efficiencies which
are supplied by the firm in order to meet needs of global demand and supply. This efficiency
includes low cost skilled labour, low cost raw material and other economic factors like tax breaks
and low trade tariffs (Hong, Lee and Zhang, 2018). There are number of methods which can be
use by business firm in order to perform. TESCO is also using function which helps firm in
meeting needs and perform is operation in global business environment. There are number of
benefits which can be use by business firm in order to perform activities and manage resources in
appropriate way. Some of these methods are discussed below:
Global Sourcing method
Preliminary Research
This is primary method which involve which focus on the enterprise where it identifies
the core and non-core activities related to operations. This will also analyses customer & market
needs by identifying competitor. This is based on the idea of developing business of TESCO and
meeting objectives, market prospective and brand position (Rejeb, Sűle and G Keogh, 2018).

Under this function, manager in TESCO use to develop basic plan which helps in defining action
and performing task according to needs of global sources. This also include strategies for
measuring performance and meeting standards according to needs.
Market and Supplier Evaluation
This is second step where firm has to focus on developing a well detailed list of suppliers.
This include classification in selection benchmarks, that can be use to select the most suitable
suppliers that can be used for particular requirement of TESCO (Selomo and Govender, 2016).
After completing this, management is business firm has to focus on developing skills which help
in influencing suppliers and collection them with business firm to perform task in effective way.
Selection of the Supplier
After performing the above stated task, the next step is to select the Supplier which are
best suitable in the list of business firm. This include all those needs which helps business firm in
performing and managing effective supply chain. Finally, an implementation schedule outlining
timelines for various suppliers is developed.
Implementation
This act as essentials stages where business firm has to take effective decisions according
to needs. In order to perform this an appropriate performance analysis schedule should be
developed, this also helps in outlining all activities which are listed in implementation process.
The implementation team should be constituted by the procurement agent and the schedule and
strategy should be published. Agreements related to shared supply, resources and logistical
arrangements are developed.
Performance Monitoring
This act as an last stage of this method where an appropriateness of Performance of
supplier will be measured. This will include both independent and in relation to the resource and
process that are applied by supply agent (Mchopa, 2019). This is mandatory function where is
has to carried in a routinely manner with reported accordingly. This also involve in-depth
evaluation of the efficaciousness of collaborative efforts that will help in achieving supplier is
obtained.

These are different methods which can be use by business firm in order to address issues
and perform function appropriately. This methods effective for TESCO whee it can perform task
appropriately by achieving business objectives.
(b) To propose a global procurement strategy which can lead to procurement excellence and
improve the company’s competitive advantage.
There are number of global procurement strategies which can because by business firm in
order to achieve business objectives and perform task ineffective way. These are mandatory to
achieve business objectives where firm can perform task in effective way. In this context, there
are number of issues which are addressed by business firm Tesco (Eckerd and Girth, 2017).
There are number of strategies which can be use by business firm a such as Tesco to achieve
effectiveness in global procurement and use effective workforce to meet needs of business. In
order to scan business environment and performing task in effective way. There are number of
roles which have to be fulfilled by business firm. Thee are associated with use appropriate
analyses of market and taking decision in effective way.
Strategic Review
Tesco is a British multinational firm which is trading in retail sector business. There are
number of issues which are faced by business firm in order to manage its function and perform
activities in effective way. In recent time, Tesco has grown as a largest retail supermarket giant.
This include number of products and services which are offered by business firm. These are
related to food, clothes and other. It was founded by Jack Cohen. He established TESCO is a
small market stall in EAST LONDON in year 1919 (Suryaningrat, I.B., 2016). company is
continuously adopting changes and performing its function in effective way which helps it in
leading Since the last few decades and grown up to be the world’s third largest grocery retailer.
Company is known for its serves. Here, company follows number of strategies which are based
on different sectors. These are non-food, retail services, International and community including
UK businesses. Along with this, company is operating at larger level where there are high
number of employees working in it.
PEST Analysis
Pestle analysis of TESCO considers the various external factors like political, economic, social,
technological, legal and environmental factors. Pestle analysis is an analysis of external factors

that how they impact an organisation. This helps to understand about different scenarios and
impact to an organisation.
 Political Factors: As one of the leading retailers across the world, the company must
follow the new rules and regulations that might come up and effects the increase and
decrease of sales. Examples like being BREXIT, company has to make options of two or
more alternatives and it is a difficult choice specially for who are equally undesirable.
This leads to up and down in the sales. Another reason that affected the company is the
US-China trade war, as company policies are changes, taxation polices are changes and
many more. Since, the tempering of market is so intense that the retail regulations of
American products of China are opposed. The change in taxation policies could results
highs and lows in sales, if there is fall in consumers spending it could result decrement of
employees, also decrease in the demands of goods and products will generate lesser
profits.
 Economic Factors: Economical factors are those factors which includes tax rates,
interest rates, wages, government activities, inflation, deflation, supply and demand of
goods, employment. These factors do not affect company directly but influences
investment value in the company. So if there is a fall in government spending’s there will
also fall in employments, demands and supply will cost to company. If there is a fall in
consumer spending the same things effects of being unemployed. Generally, government
spending may be classified into two categories: capital investments like investments for
flood defences, construction of roads and many more. This investment helps population
to have safe and secure housing and housing that can be afforded, if people can afford
there will more scope of demands of products, Tesco will benefit as more people can buy
goods and services. And, current spending like investment in hospitals, schools,
medicines. Like, Theresa May plans to increase the investment on mental health that
impacts a better mental health to employees and staff so that there is a lesser chance of
sick leaves, happier staff will pay good contribution. Tesco will get more production and
efficient over comes.
 Social Factors: These are the factors which includes age distribution, cultural affects,
incomes, health consciousness, career attitudes, trends. Due to changes and fast moving
in life, most of the people may buy goods and services under one go, as they buys goods

and services in bulks. By keeping in mind, Tesco has planned out to switch various food
products into food cum non-food model. Different customer demands varieties of
products according to their needs, social aspects, choices, cultural needs and all. So,
Tesco has managed to capture its consumer base by changing its attitudes towards
promotion of organic to satisfy their customers. It has also believed to promote local
hiring and benefiting the society.
 Technological Factors: Changes are very frequent that the company must adopt changes
as well as the new trends. It is important for every organisation that they have to keep
updating technologies. Tesco has been continuously try out and experiments with
numerous aspects in retailing and achieved greater achievements. Like, online shopping,
social media promotions all are the part of influencing demands of the customers which
provides technical benefits as well. Recently, Tesco has announced the pair-up with
Amazon Go to create new technologies for cashier less billing called “Just Walk Out” to
the retailers, the technology uses ae combination of cameras, sensors, computer vision
techniques and also deep learning allows to customers to shop, then leave the store
without waiting in line to pay. It saves time of both buyers and sellers and makes a
smooth going.
This can be elevated from the above analysis that there are number of external; factors which are
impacting on performance of business firm and leads to changes in business operation. There are
different type of risk which are associated with it and are impactful on business performance.
This make it clear for management of Tesco that they have to use planed strategies in order to
deal with external factors.
Resource & Competence Analysis
Business market is full of competition where there are large number of competitor which
have to face by Tesco. In order to acquire global resourcing function and achieve better results.
This mask it compulsory for the firm to use effective strategies of pronouncements. This helps in
meeting effective results by performing function according to needs. This can be evaluated that
the prime competitor of Tesco are ASDA and Salisbury (Hackett and Statham, 2016). These are
trading in market of UK where they provide hard completion to business firm. This make it
essential for firm to use tools an appropriate strategic plans against the competitor in order to

achieve business objectives. Further the degree of choice that differentiates different products
against the competitors emphasizes competitive positioning.
Recommendations for Future Development
TESCO is global business firm where there are number of opportunity to firm in order to deal
with business function and perform task in effective way. There is some recommendation to
business firm after evaluating the above performance. In this contemporary business
environment, it is essential to focus on future development so that goals are accomplished. It is
crucial for entrepreneurs to have proper eye on changing of market situations so that decisions
are undertaken. These recommendations are discussed below:
 To achieve competitive benefits, it is essential to states that business scanning is needed
to be done so that strategies are implemented in most efficient way. For future
development, appropriate analysis is needed to be done.
 Furthermore, it has been examined that changes in retail sector takes place at frequent
stage and it is essential for entity to adopt resources in most efficient way so that
competitive benefits are easily achieved.
 It is also recommended that Tesco should update their management system because
technology is changing at rapid scale and it is essential to focus on new & innovative
software as well as hardware so that they are used within business to reduce complexities
of work.
New employees and new approaches of recruitment are to be used so that productivity of
firm increases at rapid scale.
Ansoff Matrix Strategic Options
The Ansoff product market growth matrix is a very useful tool for developing market
launch strategies. The matrix for product and market is useful to decision makers, entrepreneurs
and marketers as it provides framework for developing their company's growth strategies.
Classification of Ansoff matrix are listed below:
Market penetration: In this market penetration low risk is there and also very small
growth opportunity is about winning new market shares with an existing product. This focuses
on increasing sales of existing product and the existing market. By using market penetration
strategy, a firm aiming to increase its market share (Fazekas and Kocsis, 2020). It can be
executive in three ways. These are Decreasing prices to attract new customers, increasing

promotion and distribution efforts and acquiring a competitor in the same market place. In Tesco
this strategy has helped its market share and the usage of product by existing customers. Some of
the strategies used in Tesco are competitive pricing strategy, ad campaigns, in implementing the
market penetration strategies efficiently. With the view to increase sale Tesco had come up with
the many offers, it may also squeeze the profit margins.
Market development: This strategy involves with the new market with the existing
product. The theoretical new markets can be including countries and new target groups. In order
to adopt new market only minor changes had to be taken into consideration. A firms enter with a
new product and the existing market. Expanding new market means expanding into new
geographic regions, customer segments etc. it is most successful when They are profitable when
there are more potential customers in the new market and they can be leverage into new market
when the firm’s own proprietary technology (Thai, 2017). Some of the other segments which are
included in this are Entering into the foreign marketing-mix, entering into the new domestic
marketing-mix and Catering into a different customer segment. In order to adapt a new market
only minor changes of a product taken into consideration. Tesco has implemented marketing
development strategies i.e. selling existing products to new market or region very well. Form the
UK, it has expanded to many countries around the world
Product development: In this product development, strategy will be taken place when
there is existing market with a new product. This may be the case when replacing existing
product or expanding the product range. When the firm have the strong knowledge of their
current market and are able to provide the innovative solutions to meet the needs of the existing
market. Tesco had developed a good number of label product to the existing market. Like the top
brands. However, it is worth mentioning that developing new products is usually costly.
Diversification: In a diversification strategy, the firms enters a new market with a new
product. It also offers a great potential to increase the revenue, although such strategy being risky
in both of market and product development are required. Selling a new product in the new
market is not an easy thing but Tesco has started a grocery business and over time it may
diversification into many areas. Some of the example are credit cards, mortgages, and insurance
products.
This matrix is useful for business firm in meeting needs and performing task in effective
way. This is also related to meeting business function and performing task according to needs of

business firm. This matrix can be used in order to meet business needs where firm can evaluate
the current strategies which are valuable in order to meet objectives. This also helps in
developing profitability and productivity by choosing appropriate business.
Review of Probable Options
There are number of option which are available to choose business firm and must be use
in order to address issues and perform task in effective way. This can also be evaluated that
Ansoff matrix is useful for business firm in evaluating business options and performing the
research in effective way.
 One of the strategic option available to business firm is related to developing new market.
This is useful for business firm as it helps in expanding business operation in new market.
In this, company can transfer its function to Asian market, there are number of
opportunities which can be use in order to perform function and mange talent. Here,
company can focus on outsourcing business function which helps in achieving business
objectives.
 Diversification also act as essentials fetcher which because by business firm in order to
meet needs and perform task in effective way. Under this there are number of roles which
can be used by business manager in order to attract customer by lunching new product in
new market. This is risky strategy but using this can help firm in performing its function
in different roots and increasing profitably option.
CONCLUSION
It can be concluded from the above stated information that there are number of function
which have to be performed by business firm in order to manage employees and use global
sourcing. This also states that there are number of benefits which can be use by business firm in
order to evaluate performance of firm a procurement of risk. This states that business firm can
perform task in effective direction by using tools in appropriate way. In business, there are
number of opportunists which can be use by business firm in order to manage roles of employees
and manage risk accordingly.

REFERNCES:
Books and Journals
Lysons, K. and Farrington, B., 2016. Procurement and supply chain management. Pearson.
Hong, Z., Lee, C.K. and Zhang, L., 2018. Procurement risk management under uncertainty: a
review. Industrial Management & Data Systems.
Rejeb, A., Sűle, E. and G Keogh, J., 2018. Exploring new technologies in procurement.
Selomo, M.R. and Govender, K.K., 2016. Procurement and Supply Chain Management in
Government Institutions: A Case Study of Select Departments in the Limpopo Province,
South Africa. Dutch Journal of Finance and Management, 1(1), p.37.
Mchopa, A.D., 2019. BOOK REVIEW PROCUREMENT RISK: SHORT GUIDE TO
BUSINESS RISK BY RICHARD RUSSILL. ASHGATE PUBLISHING LIMITED,
FARNHAM–ENGLAND, 2010. ISBN: 978-0-566-09218-3. 132 PP.
Eckerd, A. and Girth, A.M., 2017. Designing the buyer–supplier contract for risk management:
Assessing complexity and mission criticality. Journal of Supply Chain Management,
53(3), pp.60-75.
Suryaningrat, I.B., 2016. Raw material procurement on agroindustrial supply chain management:
a case survey of fruit processing industries in Indonesia. Agriculture and Agricultural
Science Procedia, 9, pp.253-257.
Hackett, M. and Statham, G. eds., 2016. The aqua group guide to procurement, tendering and
contract administration. John Wiley & Sons.
Fazekas, M. and Kocsis, G., 2020. Uncovering high-level corruption: cross-national objective
corruption risk indicators using public procurement data. British Journal of Political
Science, 50(1), pp.155-164.
Thai, K.V. ed., 2017. International handbook of public procurement. Routledge.